Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 26, September 28, 2020 2019 ASSETS: Current assets: Cash and cash equivalents $ 38,016 $ 48,844 Marketable securities 52,927 51,713 Accounts receivable, net 16,120 22,926 Inventories 1,061 4,106 Vendor non-trade receivables 21,325 22,878 Other current assets 11,264 12,352 Total current assets 143,713 162,819 Non-current assets: Marketable securities 100,887 105,341 Property, plant and equipment, net 36,766 37,378 Other non-current assets 42,522 32,978 Total non-current assets 180,175 175,697 Total assets 323,888 $ 338,516 LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable 42,296 $ 46,236 Other current liabilities 42,684 37,720 Deferred revenue 6,643 5,522 Commercial paper .996 5,980 Term debt 8,773 10,260 Total current liabilities 105,392 105,718 Non-current liabilities: Term debt 98,667 91,807 Other non-current liabilities 54,490 50,503 Total non-current liabilities 153,157 142,310 Total liabilities 258,549 248,028 Commitments and contingencies Shareholders' equity: Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 16,976,763 and 17,772,945 shares issued and outstanding, respectively 50,779 45,174 Retained earnings 14,966 45,898 Accumulated other comprehensive income/(loss) (406) 584) Total shareholders' equity 65,339 90,488 Total liabilities and shareholders' equity 323,888 $ 338,516 See accompanying Notes to Consolidated Financial Statements. Apple Inc. 1 2020 Form 10-K | 33Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 26, September 28, September 29, 2020 2019 2018 Cash, cash equivalents and restricted cash, beginning balances $ 50,224 $ 25,913 $ 20,289 Operating activities: Net income 57,411 65,256 59,531 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 11,056 12,547 10,903 Share-based compensation expense 6,829 6,068 5,340 Deferred income tax benefit (215) (340) 32,590) Other (97) (652) 444) Changes in operating assets and liabilities: Accounts receivable, net 6,917 245 (5,322) Inventories (127) (289) 828 Vendor non-trade receivables 1,553 2,931 (8,010) Other current and non-current assets (9,588) 873 423) Accounts payable (4,062) (1,923) 9, 175 Deferred revenue 2,081 625) (3) Other current and non-current liabilities 8,916 (4,700) 38,449 Cash generated by operating activities 80,674 69,391 77,434 Investing activities: Purchases of marketable securities (114,938) (39,630) (71,356) Proceeds from maturities of marketable securities 69,918 40,102 55,881 Proceeds from sales of marketable securities 50,473 56,988 47,838 Payments for acquisition of property, plant and equipment (7,309) (10,495) (13,313) Payments made in connection with business acquisitions, net (1,524) 624) (721) Purchases of non-marketable securities (210) (1,001) (1,871) Proceeds from non-marketable securities 92 1,634 353 Other (791) (1,078) 745) Cash generated by/(used in) investing activities 4,289) 45,896 6,066 Financing activities: Proceeds from issuance of common stock 880 781 669 Payments for taxes related to net share settlement of equity awards 3,634) (2,817) 2,527) Payments for dividends and dividend equivalents (14,081) (14,119) (13,712) Repurchases of common stock (72,358) (66,897) (72,738) Proceeds from issuance of term debt, net 16,091 6,963 6,969 Repayments of term debt (12,629) (8,805) (6,500) Repayments of commercial paper, net (963) (5,977) (37) Other (126) (105) Cash used in financing activities (86,820) 90,976) 87,876) Increase/(Decrease) in cash, cash equivalents and restricted cash (10,435) 24,311 5,624 Cash, cash equivalents and restricted cash, ending balances $ 39,789 $ 50,224 $ 25,913 Supplemental cash flow disclosure: Cash paid for income taxes, net 9,501 $ 15,263 $ 10,417 Cash paid for interest 3,002 $ 3,423 $ 3,022 See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 2020 Form 10-K | 35Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 26, September 28, September 29, 2020 2019 2018 Net sales: Products 220,747 $ 213,883 $ 225,847 Services 53,768 46,291 39,748 Total net sales 274,515 260, 174 265,595 Cost of sales: Products 151,286 144,996 148,164 Services 18,273 16,786 15,592 Total cost of sales 69,559 161,782 63,756 Gross margin 104,956 98,392 101,839 Operating expenses: Research and development 18,752 16,217 14,236 Selling, general and administrative 19,916 18,245 16,705 Total operating expenses 38,668 34,462 30.941 Operating income 66,288 63,930 70,898 Other income/(expense), net 803 1,807 2,005 Income before provision for income taxes 67,091 65,737 72,903 Provision for income taxes 9,680 10,481 13,372 Net income $ 57,411 $ 55,256 $ 59,531 Earnings per share: Basic 3.31 $ 2.99 $ 3.00 EA EA Diluted 3.28 $ 2.97 $ 2.98 Shares used in computing earnings per share: Basic 17,352, 119 18,471,336 19,821,510 Diluted 17,528,214 18,595,651 20,000,435 See accompanying Notes to Consolidated Financial Statements. Apple Inc. | 2020 Form 10-K | 31